Hercula Cycles started August with 25 bicycles that cost $ 65 each. On August 16

Question

Hercula Cycles started August with 25 bicycles that cost $ 65 each. On August 16 Hercula bought 50 bicycles at $80 each. On August 31Hercula sold 38 bicycles for $100 each.

Prepare Hercula ?Cycle's perpetual inventory record assuming the company uses the? weighted-average inventory costing method. Start by entering the beginning inventory balances. Enter the transactions in chronological? order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual? record, calculate the quantity and total cost of inventory? purchased, sold, and on hand at the end of the period.

Journalize the August 16 purchase of merchandise inventory on account and the August 31 sale of merchandise inventory on account.

Explanation / Answer

Journal Entry :

Purchase account Dr (50*80) $ 4000

To Accounts Payable Account Credit $4000

Inventory Account Date Opening Balance Purchases Sold Closing Balance Quantity Price per unit Total Quantity Price Total Quantity Price Total Quantity Price 01-Aug 25 65 1625 0 0 0 0 25 1625 16-Aug 25 65 1625 50 80 4000 75 5625 31-Aug 75 75 5625 0 0 0 38 75 2850 37 2775

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